The fate of the North American Free Trade Agreement is balanced on that one word and the unpredictable whims of President Donald Trump, who said last week that he “probably will end up terminating NAFTA at some point.”
Such a move would devastate Nebraska, which has benefited immensely in the deal’s 24-year history. Jobs would certainly be lost. And the entire state would feel the pain of even further decreases to tax receipts, which continue to lag below forecasts because of the ongoing downturn in agriculture, the state’s largest industry and one of NAFTA’s biggest beneficiaries.
Nebraska exported nearly $6.4 billion worth of goods in 2016, according to the U.S. Census Bureau, while importing about $3.6 billion – a nearly $2.8 billion trade surplus in just one year.
Yet, a majority of those exports can be assumed to have gone to Canada and Mexico, the partners in NAFTA. Based on 2014 data from the Office of the U.S. Trade Representative, the most recent year available, Nebraska’s biggest export markets of Canada and Mexico combined for $3.5 billion – a figure that’s almost surely increased and nearly matches the entirety of all imports into Nebraska.
Nebraska’s governor and entire congressional delegation, all Republicans, are doing their part to preserve market access for their constituents. All have broken with the president on the issue and defended free-trade agreements that are a boon for Nebraska’s producers and manufacturers.
Rep. Adrian Smith, who represents the state’s ag-dominated 3rd District, correctly noted NAFTA “has done some great things for American agriculture.” Sen. Ben Sasse took it one step further, calling the Trump administration’s trade theory “just wrong” and reminiscent of “1820s-era mercantilism” before hitting the nail on the head: “More trade is good. More trade is great for Nebraska.”
As is often said, “A rising tide lifts all boats.” Nebraska’s economy has long been buoyed by selling the fruits of its land labor, whether farm commodities or manufactured goods, across the world. Free trade and the resulting access to foreign markets are vital to continuing this success.
Last Friday, Gov. Pete Ricketts, a strong proponent of trade deals, told the Journal Star that he remains “confident in (Trump’s) ability to do the right thing,” while noting the president’s threat to exit was “a different strategy.”
We hope the governor is right. But Trump’s accusation that Canada and Mexico were being “very unfair” in negotiations and his subsequent, demonstrably false claim that NAFTA is the “worst trade deal ever made” give us pause.
Free trade in Nebraska supports jobs and generates tax revenue – and NAFTA has been a great deal for this state worth preserving. Pulling the rug out from under Nebraskans would be, to use one of Trump’s favorite words, a disaster.